The Changing Face Of Office Space

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Fueled by the design preferences of Millennials, the rise of telecommuting and continuing economic concerns, U.S. office tenants are opting for smaller spaces that promote more collaborative work environments.

That was the observation of show host Michael Bull and his guests on the most recent episode of “America’s Commercial Real Estate Show,” which examined office-use strategies of Corporate America, as well as some of the common mistakes office tenants make.

“From a utilization point of view, everything’s running about 25 percent [smaller] than it did in the past,” said Rick Ferguson, vice president, corporate office services for Bull Realty. “If someone had a 10,000-square-foot office space, it’s now 7,500 square feet.”

“What we’re seeing is a tremendous push towards more space compression … and a real focus is to get that collaborative environment,” added Scott Panzer, a New York-based vice chairman of Jones Lang LaSalle.

According to Panzer, financial service firms, which once typically sought 250 square feet of office space per employee, now seek 205 square feet for each worker. Media and advertising firms have similarly decreased their requirements, he said.

“The Googles of the world, they’re already [at] one person per 100 square feet,” Panzer added.

The use of hoteling, or providing office space to workers on an as-needed basis rather than permanently reserving space for a particular individual,  to reduce overall space demands has become a significant trend in recent years, said Bob Chodos, a principal with Colliers International in Chicago.

“In the last 72 hours, I’ve had two companies ask me these questions: ‘Why is that I can walk around my space and see all these empty offices when people are traveling [to be with] our clients? What can I do to be more efficient?’” Chodos said.

Waiting until a lease expiration is fairly close before beginning negotiations for the next lease is a common mistake tenants make, said Richard Rhodes, managing principal with Cresa Bethesda.

“I’m working on two transactions now that have five years left where we are renegotiating the rent downward and extending the leases for [another] five years,” he said. “Had we not been at that point, that opportunity would never have presented itself. The more time you have [remaining on a lease], the more leverage you have, especially in a soft market.”

“I’ve seen that mistake as well, where tenants don’t have enough time, and they can’t negotiate from a position of power because they’ve started the deal too late,” said Michael Bull, president and founder of Bull Realty.

The entire episode on corporate office tenant strategies is available for download at www.CREshow.com.

The next “America’s Commercial Real Estate Show” will be available Aug. 30 and will examine the top college real estate programs.

“America’s Commercial Real Estate Show” is a national talk radio show about commercial real estate. The show host is 30-year commercial real estate veteran Michael Bull, CCIM, founder of Bull Realty, Inc, a regional commercial brokerage firm with three offices headquartered in Atlanta, Georgia.

 

Source:  CityBiz

Broward Has It’s Ups And Downs, Palm Beach Sees Tempered Improvement

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According to Grubb & Ellis’ recently issued South Florida Office Trends Report for First Quarter 2012, Broward County’s “up and down pace of net absorption” continued while “tempered improvement” was seen during the First Quarter in Palm Beach County.

You can view Grubb & Ellis’ complete Office Trends Report for each county by clicking on the links below:

Office Trends Report—First Quarter 2012 Broward County

Office Trends Report—First Quarter 2012 Palm Beach County

Office Trends Report—First Quarter 2012 Miami-Dade County

 

Thank you to Eric Messer, Research Services Manager, Grubb & Ellis.

Broward And Palm Beach At Opposite Ends Of Vacancy Spectrum

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By Eric Messer

Broward County has the lowest vacancy rate reported in South Florida.

However, the area’s strong ties to the residential sector is expected to hinder sizeable job growth through the coming year.

No significant shifts are expected for the office sector in Fort Lauderdale and its suburban submarkets. A balance between demand and supply will likely continue through the majority of 2012.

Renewals and relocations will continue to dominate transaction activity as tenants in the market take advantage of space opportunities.

Conversely, the Palm Beach market holds the highest vacancy rate throughout Florida.

The market continued its leveling recovery as sluggish economic growth and lackluster improvements in the housing sector hinder significant expansions in employment. The office sector has seen moderate declines in vacancy since the 23.8 percent peak in first quarter of 2010.

To view the reports in their entirety, click on the links below:

4Q11 Broward Office Market Trends Report

4Q11 Palm Beach Office Market Trends Report

 

Eric Messer is Research Services Manager for Grubb & Ellis Company in Boca Raton. He can be reached at eric.messer@grubb-ellis.com.

New Trend For 2011: Architectural Projection Mapping

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If you haven’t heard about it, “projection mapping” is defined by Mashable as “a relatively new technology that animates stationary objects with 3D video.”  While researching this “new technology”, it appears to be the latest and greatest.  Still, it seemed to me an awful lot like projecting a video on a really big surface, which is hardly “new technology.”

Then I took a few minutes and actually watched some video examples.  Wow!  Absolutely incredible!  When done well, projection mapping creates the powerful illusion of a building actually coming to life.  Take a look for yourself. Below is a video of an Architectural Projection Mapping production in London:

Architectural Projection Mapping is a fancy term for playing a light show on a building. The designer plans out the show for each buildings architectural features.  Think in terms of marketing building renovations!

Evan Grant of Seeper, an Arts and Technology firm based in East London that specializes in projection mapping productions, explains the technology this way, “In simple terms, we take the architectural plans of a building — or if they don’t exist, we create them. Using these plans, we recreate the building as a 3-D model using computer software. Using super-bright projectors and our custom software, we project the model onto the building, aligning it to the architectural details.”

Florida CRE Market Heading Toward Recovery?

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As of mid-year 2011, the Florida commercial real estate market reveals a marked turning point that began late 2010, according to the Florida Market Perspective Mid-Year 2011, a comprehensive assessment and outlook on commercial real estate throughout the state, released by CB Richard Ellis (CBRE).

“Our outlook for Florida is a slow and steady recovery over the next five years,” says Mary Jo Eaton, Senior Managing Director for CBRE in Florida. “During the remainder of 2011 we anticipate seeing more leasing and sales activity—largely in prime submarkets.”

Key Findings:

  • Select industries are beginning to re-establish their confidence in the market through expansions and long-term lease commitments.
  • Multihousing properties are highly targeted by investors in Florida. In core markets, international investors continue to show strong interest in commercial real estate assets.
  • Distressed assets continue to be a concern, but Florida’s lengthy foreclosure process slows the delivery of distressed assets available for acquisition.

Comparatively, Miami is leading the state in new activity. While lease renewals dominate markets outside the core regions, such as Jacksonville and Southwest Florida, market indicators including rental rates and occupancy are showing signs of stabilization. North and Central Florida markets have yet to experience a surge in activity, but CBRE Florida leadership agree that stabilized market indicators and strengthened fundamentals put Florida in a good position for recovery.

What’s your take?  Share your perspective by leaving a comment below.

 

 

CBRE’s Florida Market Perspective reports on seven major markets in Florida, covering office, industrial, retail, and multifamily properties. For the complete look at commercial real estate in Florida, go to www.cbre.com/fmp.

Boca Village Corporate Center Under Contract

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The 100,000-square-foot Boca Village Corporate Center, one of the premier Class A office buildings in Boca Raton, is under contract for about $30 million to an investment group from Brazil. The developable land next door is not part of the deal, sources said.

The identity of the buyer was not known, but sources said the buying group is made up of individual investors seeking to park their
money in a stable, revenue-generating property. The character of the group is important because groups of individual investors from Brazil are increasingly interested in South Florida’s commercial inventory.

Malcolm Butters, Ned Segal and Art Falcone were partners in the development of the Boca Village Corporate Center, at 4855 Technology Way. Tenants include professional services firms like Oppenheim and Smith Barney.

Butters Construction and Development would not comment on the possible sale. CB Richard Ellis’ Chris Lee and is representing both parties in the deal, was not immediately available for comment.

Peter Reed, principal with Commercial Florida Realty Services, which is not involved in the deal, said the interest in Boca Village, which may sell for as much as $300 a square foot, is justified because of its location, the quality of the building and the solid tenancy.

Tom Capocefalo, managing director with tenant representative firm Studley, was not involved in the deal, but said the “top tier” tenancy and the small number of trophy office buildings in Boca Raton drove the price.

Source:  SFBJ